Some Tips On Managing Travel & Expense (T&E)
With all of the moving parts within an operation, it can be easy to lose track of where money is going. This is especially true when it pertains to travel expenses (start-ups are notorious for this), as it is easy for those to abuse this type of expenditure when left unchecked. While for businesses there is the need for employees to travel to different destinations in order to meet new clients and partake in market expansion, that doesn’t mean that managing travel and expenses has to be pushed to the side.
The priority for managing Travel & Expense (T&E) has renewed pressure to ensure that it is being cost-optimized. Companies that are seeking to cut costs need to pay close attention to how much they are truly spending on T&E and locate any areas in which they are not being particularly “cost-conscience”. Fortunately, there are some tips to take into consideration that can help you with adequately managing your Travel & Expense (T&E).
10 Tips For Managing Travel & Expense (T&E)
Ten tips for managing your Travel and Expense (T&E) include the following:
Travel Agency Audit - If you book your travels through a travel agency, then it wouldn’t hurt to look through all of your invoices and ensure that everything lines out. There could be billing errors or inaccurate charges that you are paying for unknowingly, in which you would need to audit the invoices to really see. Without a random audit, there is a higher probability of inaccuracy due to the agency knowing that they won’t be audited by you. Therefore, take a look at those invoices just to be sure.
T&E Policy - Most companies develop some sort of Travel and Expense (T&E) policy for their employees, with an outlined format explaining what can and cannot be expensed. Without a policy and specific items outlined as “able to be expensed”, this leaves the policy open to interpretation by the employee.
Expense Report Audit - Depending on the size of the company, usually, the individual who is approving expenses does not solely approve expenses all day long. Therefore, it is likely that they are not fully vetting the expense report and simply just auto-approving. If you are experiencing this, it may be beneficial to have a third party audit your expense reports to ensure policy compliance. It is typical that your expense toolset vendor will offer audit services.
Agency Credits From Vendors - It is important that you are aware of what credits the agency is getting from its travel vendors. These credits result in agency behavior that may be counter to you getting the best pricing from your agency.
T&E Analytics - Providing your business heads with a “spend analytics” report will provide the visibility they need to develop a firm grasp on how much their T&E spend really is. Expense reports are approved after being submitted and the analytics will provide you with a detailed breakdown of all the travel expenses you are seeking. You may have an employee that stays at the same hotel every time they travel to a specific location but see that the hotel is >$450/night. With the report showcasing this, you may want to follow up with this employee and let them know they will have to find a cheaper hotel option.
Travel Budgeted By Cost Center - Finance should be budgeting travel by cost-center or business head, meaning that employee travel should not fall under one blanket “travel” expense or credit card. Without a strict budget set for travel at a cost-center level, each business cannot manage its travel spend effectively.
Discretionary Travel - Whenever there is cost pressure from Finance, this travel area will always be the first to be eliminated. Discretionary travel pertains to attending conferences, having offsite team-building meetings, etc. More often than not, a smaller group of people can attend these events rather than the large groups that go. A beneficial way to manage discretionary travel is to use a travel approval tool with management & finance on the workflow approval. The approval should include entering “travel description” and “reason” to ensure the trip is a must.
Auto Rentals - If you have two to three people all traveling to the same location, there is no reason for everyone to have their own auto rental. They will all be going to the same places while there so it only makes sense to carpool. It is also important to note that if you are only traveling short distances, Uber/Lyft will more than likely be much cheaper in comparison.
Employees Searching The Web - Sometimes employees can find better rates than what is being presented through an agency website. While air should almost always be booked through an agency for governance if the employee finds a lower fare then have the agency match it. The same goes for a hotel if the employee is able to find a lower rate.
Lowest Comparable Airfare - Verify that your booking tool identifies the lowest comparable airfare and that policy clearly states that employees must book with the lowest rate. Note “comparable” is key (i.e., same origin, same destination, same # of stops).
Hotel Bookings - Be sure the agency checks after the hotel is booked if the rates go down. Also, consider hotel bookings with “no cancel” pricing if the traveler is confident that the trip will not be canceled.
With the complexity of Travel and Expense (T&E), it can become difficult to manage. Essentially, you want a smooth and cost-effective travel experience for your employee and through utilizing these tips you will be able to better optimize your T&E spend without sacrificing quality.
Outsourcing for Travel and Expense (T&E) Management
Travel and Expense (T&E) management is often one of the most difficult areas to track. Especially with growing companies and a stretched-thin staff - how does anyone have the time to thoroughly check their T&E? Fortunately, there are outside tools and resources available that provide adequate insight into Travel and Expense (T&E) management.
Mike Glass runs GPC (Glass Procurement Consulting), a procurement consulting firm focused on optimizing a company's spend. Mike has worked in senior procurement management positions at NVIDIA, Google, Meta, Fitbit, and Flextronics. Mike would enjoy getting your insight on any procurement topic, feel free to contact Mike at mike@glassprocurementconsulting.com.
